Editorial: Despite its troubles, Lincoln hotel good for Springfield

Tuesday

Oct 27, 2009 at 12:01 AMOct 27, 2009 at 2:15 PM

We learned last week that the political football that is the Abraham Lincoln Hotel and Conference Center will be officially punted by the state of Illinois on Dec. 14. The downtown hotel will go to the highest bidder at auction that day. We greet this as good news, though perhaps not so much in the way that many observers and political aspirants do.

We learned last week that the political football that is the Abraham Lincoln Hotel and Conference Center will be officially punted by the state of Illinois on Dec. 14. The downtown hotel will go to the highest bidder at auction that day.

We greet this as good news, though perhaps not so much in the way that many observers and political aspirants do.

Here’s our take: Selling this property will probably put it back in the hands of a national hotel operation with a strong national marketing and management structure that will help it better contribute to the local economy. With the Abraham Lincoln Presidential Library and Museum now bringing tens of thousands of visitors downtown each year, the former Ramada Renaissance has a potential guest base that was unimaginable when it first opened in 1985. A national outfit is better poised to take advantage of such an asset.

As a secondary benefit, it should give the state back something from its $15.5 million original loan, which now stands at $29.9 million with unpaid interest. It won’t be the total amount, of course, which isn’t good for the state. But it’s better than what the state has been collecting on it for the last quarter century, which is roughly nothing.

A distant third on our list of benefits is what we will probably hear most about regarding this transaction in the upcoming political season.

“It was built with taxpayers’ money but benefited only those with powerful political connections. Well, those days are over,” said Treasurer Alexi Giannoulias, who also is a candidate for U.S. Senate, in announcing the auction date.

We’re not here to excuse the deal that got the state to this point. In hindsight, which is always perfect, there was ample warning in market research that this downtown hotel could be a perennial money-loser. But as the rhetoric heats up in the coming weeks and months about the hotel, its investors, its eventual sale price and the state’s loss on it, we think some context is in order.

While Giannoulias is correct that political connections helped get this project off the ground, the benefits to the original investors are questionable. The 86 investors organized by William Cellini put up $7 million of their own money. A selling point at the time was that this was an ideal tax shelter for the investors that would help the local construction industry, which at the time was suffering under a crushing recession. But when the hotel went into foreclosure last year, the investors had to pay those years of tax depreciation write-offs back to the IRS.

Because of Cellini’s involvement, there is a perception that the Springfield hotel was a unique deal handed specifically to one person. In reality, the Ramada Renaissance (and two other hotels that met similar fates) was financed through the Insured Mortgage Pilot Program of 1982, a $100 million state program launched in response to high interest rates and unemployment. As a major construction project, it provided “economic stimulus” for Springfield long before “economic stimulus” was the household term it is today.

“I thought it was good for the city. In 1983, the building trades were about 25-percent unemployed. Since the people of Springfield were good to me, I thought this was a way of returning something to the people of Springfield,” Dr. William Strow, one of the original investors, told The State Journal-Register in 2007.

Was the Ramada Renaissance a good deal for the state? Absolutely not. Is Springfield better off with it there now? Probably.

Many of the officials who had roles in the Ramada Renaissance story over the years will be on the ballot in the 2010 elections. They include Gov. Pat Quinn, Giannoulias, former Treasurer Judy Baar Topinka and perhaps former Attorney General Jim Ryan. Voters are sure to hear this issue spun to the advantage of or hurled against those candidates in simplistic and sensational terms.

But a closer look at the context of this deal reveals that heroes and villains aren’t so easily defined — much as candidates would like to have us think otherwise. We urge voters to resist the super-simplified interpretations of this issue that are sure to come their way as campaign season heats up.

State Journal-Register

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